Malaysian E Commerce Journal (MECJ)3(2) (2019) 06-11 Cite The Article: Elaine Joy C. Apat, Jay Pee D. De Villa, Venus C. Ibarra (2019). Evolution, Implementation And Effects Of International Accounting Standards In The Philippines. Malaysian E Commerce Journal, 3(2) : 06-11. ISSN: 2616-5155 (Online) CODEN: MECJBU ARTICLE DETAILS Article History: Received 15 November 2018 Accepted 17 December 2018 Available online 22 January 2019 ABSTRACT This paper discussed the Evolution, Implementation and Effects of International Accounting Standards in the Philippines. Rules and standards governing the accountancy profession in the Philippines is under R.A 9298. Philippines Accounting Standards and Practices were based on the established Generally Accepted Accounting Practices initiated by the United States. In 2005, country decided to shift to European accounting standards better known as International Financial Reporting Standards. The main reason in shifting to the European accounting standards was the inaccurate financial information associated in the Asian crisis, adversely affected entities’ business decisions. Implementation of the new accounting standards emphasizes accuracy, transparency in financial reporting. This paper will be useful to underdeveloped and developing countries that are challenged to adapt financial accounting standards, therefore assisting them in analyzing financial statements for better business decisions. Complex market and financial environment can be easier and transparent. Cost effective financial statements will help them to more accurate comprehensive decisions affecting the countries developing economic growth. KEYWORDS International Accounting Standards, International Financial Reporting Standards, R.A 9298, financial reporting, financial statements 1. INTRODUCTION Accounting is a system that measures business activities, processes information into reports and communicates the results to decision makers. Without accounting, businesses could not function optimally; they would not know where they stand financially, whether they are making a profit or not, and they would not even know their financial situation. The evolution of accounting happened in ancient time, dated 8,500 B.C., Mesopotamia now called Iraq, China, Babylonia, Greece and Egypt. They have their own ways of recording wages and taxes that is one of the vital components of our modern accounting. Luca Pacioli, a Franciscan friar and the father of modern accounting, plays a significant role in the development of accounting, He introduced the idea of double entry bookkeeping that is still presently used in modern accounting [1]. Accounting evolves through time and becomes a significant instrument in business world, but like any other professions, accounting profession is governed by its own Implementing Rules and Regulations (IRR). The rule and standards governing the accountancy profession in the Philippines is under Republic Act 9298, or the Accountancy Act of 2004. Historically, Philippine Accounting Standards, rules and practices were based on the established Generally Accepted Accounting Practices (GAAP) initiated by the United States, but in year 2005, the country decided to shift to European accounting standards. In the Philippines, implementation of these standards is under the Philippine Financial Reporting Standards (PFRS) which is the local version of International Financial Reporting Standards (IFRS). Financial crisis in year 1997, which adversely affected entities’ decision making is the main reason for shifting to a new standard. Implementation of the new accounting standards emphasizes accuracy, transparency, and error free financial reporting. It will also be easier for foreign investors to analyze the financial reports of companies and gauge their financial standing. The aims of this paper are the following: to show the world of how the Philippines adopted the accounting system from basically U.S. GAAP to the current international accounting progress and development of SEC Roadmap, to help other countries that are challenged in adopting and executing the accounting practices so they can make their own work plan of accounting standards that will assist them in making comparisons of financial reporting easier, cost effective and efficient, thereby resulting to a well informed and rational business decisions worldwide. 2. THEORETICAL CONCEPT In the Philippines, adoption of accounting is based on Philippine Financial Reporting Standard (PFRS) which is the local version of International Financial Reporting Standards (IFRS). Philippine accounting principles also adhere with the U.S. Generally Accepted Accounting Principles (GAAP). The practice of accountancy profession in the country is being promulgated and monitored by PRC-BOA or Board of Accountancy. The rules and standards governing the accountancy profession in the Philippines is under Republic Act 9298, or the Accountancy Act of 2004. The IFRS in early 2013 established the Accounting Standards Advisory Forum (ASAF) to improve cooperation among worldwide standard setters and advise the International Accounting Standards Board (IASB) as it develops IFRS. The Financial Accounting Standards Board (FASB) was selected as one of the ASAF’s twelve members. The FASB’s membership on the ASAF is an opportunity to represent U.S. interests in the IASB’s standard-setting process and to continue the process of improving and converging U.S. GAAP and IFRS. The FASB was nominated for membership Malaysian E Commerce Journal (MECJ) DOI : http://doi.org/10.26480/mecj.02.2019.06.11 REVIEW ARTICLE EVOLUTION, IMPLEMENTATION AND EFFECTS OF INTERNATIONAL ACCOUNTING STANDARDS IN THE PHILIPPINES Elaine Joy C. Apat* 1 , Jay Pee D. De Villa 2 , Venus C. Ibarra 3 1 Laguna State Polytechnic University, San Pablo City, Laguna Province, Philippines 2 San Pablo Colleges, San Pablo City, Laguna Province, Philippines 3 Ateneo de Manila University, Manila, Philippines (Co - Author) *Corresponding Author Email: elaine.apat@gmail.com This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited